The federal finance minister, Kemi Adeosun, told members of the House of Representatives earlier this month that the FGN’s capital releases within the 2016 budget had reached a record N1trn (US$3.3bn). The budget was only approved in May and this year’s remains with the National Assembly, so the total for releases could increase. She was confident that “we will do more this year”, citing the improvement in stability in the Niger Delta. The FGN’s expansionary fiscal stance has become the principal driver of growth, which we forecast at a modest 2.1% in 2017.
Both the new Development Bank of Nigeria and the CBN’s sizeable role in development finance could give a boost to public capital expenditure.
The president’s budget speech to the assembly in December put capital spending in 2017 at N2.24trn and so just above the administration’s threshold of 30% of total spending. The figure does include the capital element of statutory transfers.
The Economic Recovery and Growth Plan 2017-20 has a lower figure for this year of N1.95trn, easing back to N1.41trn at the end of the period. Its projections may prove the more realistic in view of the budget’s high hopes of non-oil revenue generation.
Sources: CBN, drawn from the Office of the Accountant General of the Federation; FBNQuest Research
Over the 12 months to September 2016, capital spending amounted to N970bn, and personnel (excluding pensions) to N1.78trn (see chart). The CBN data series does show no disbursements in two of the months (October 2015 and January 2016).